UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-K

[X]   Annual  report pursuant to Section 13  or  15  (d)  of  the
Securities Exchange Act of 1934 [No Fee Required]
For the fiscal year ended December 31, 1997 or

[  ]   Transition report pursuant to Section 13 or 15 (d) of  the
Securities Exchange Act of 1934 [No Fee Required]
For    the    transition    period    from    _____________    to
_________________.
Commission file number 33-30891

              DEAN WITTER PRINCIPAL PLUS FUND L.P.

(Exact name of registrant as specified in its Limited Partnership
Agreement)

            DELAWARE                                          13-
3541588         (State      or     other     jurisdiction      of
(I.R.S. Employer
             incorporation            of            organization)
Identification No.)

c/o Demeter Management Corporation
Two   World   Trade   Center,  New  York,  N.Y.   -   62nd   Flr.
10048        (Address    of    principal    executive    offices)
(Zip Code)

Registrant's    telephone    number,    including    area    code
(212) 392-5454

Securities registered pursuant to Section 12(b) of the Act:
                                                   Name  of  each
exchange
Title                 of                each                class
on which registered

          None                                         None

Securities registered pursuant to Section 12(g) of the Act:

             Units of Limited Partnership Interest

                        (Title of Class)


                        (Title of Class)

      Indicate by check mark whether the registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes   X      No

      Indicate  by check mark if disclosure of delinquent  filers
pursuant to Item 405 of Regulation S-K (section 229.405  of  this
chapter)  is not contained herein, and will not be contained,  to
the  best  of  registrant's knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part  III  of
this Form 10-K or any amendment of this Form 10K. [X ]

State  the  aggregate  market  value  of  the  Units  of  Limited
Partnership  Interest held by non-affiliates of  the  registrant.
The  aggregate market value shall be computed by reference to the
price  at  which units were sold, or the average  bid  and  asked
prices of such units, as of a specified date within 60 days prior
to the date of filing: $52,543,701.99 at January 31, 1998.

              DOCUMENTS INCORPORATED BY REFERENCE
                          (See Page 1)




<PAGE>
<TABLE>       DEAN WITTER PRINCIPAL PLUS FUND L.P.
              INDEX TO ANNUAL REPORT ON FORM 10-K
                       DECEMBER 31, 1997

<CAPTION>

Page No.
<S>                                                         <C>
DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . . .  .
 . . . .   1

Part I .

   Item 1. Business. . . . . . . . . . . . . . . . . . . . . .  .
 .  2-4

  Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . .
 .   5

   Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . .
 .  5-6

   Item 4. Submission of Matters to a Vote of Security Holders  .
 . .  6


Part II.

  Item 5. Market for the Registrant's Partnership Units and
          Related Security Holder Matters . . . . . . . . . . . .
 .  7
   Item 6. Selected Financial Data . . . . . .. . . . . . . . . .
 .    8

  Item 7. Management's Discussion and Analysis of Financial
           Condition and Results of Operations. . . . . . . . . .
 . 9-16

   Item 8. Financial Statements and Supplementary Data. . . . . .
 . . 16

  Item 9. Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure. . . . . . . . . .
 . . 16
Part III.

  Item10. Directors, Executive Officers, Promoters and
           Control Persons of the Registrant . . . . . . . . .  .
17-21

   Item11. Executive Compensation . . . . . . . . . . . . . . . .
 .   22

  Item12. Security Ownership of Certain Beneficial Owners
           and Management . . . . . . . . . . . . . . . . . . . .
 . . 22

   Item13. Certain Relationships and Related Transactions . . . .
 .   22

Part IV.
  Item14. Exhibits, Financial Statement Schedules, and
          Reports on Form 8-K . . . . . . . . . . . . . . . . . .
 .  23

</TABLE>
<PAGE>
<TABLE>

            DOCUMENTS INCORPORATED BY REFERENCE


Portions  of  the  following documents are  incorporated  by
reference as follows:

<caption
Documents Incorporated                Part of Form 10-K
<S>                                          <C>
Partnership's Registration Statement
on Form S-1, File No. 33-95414                I and IV

December 31, 1997 Annual Report
for the Dean Witter Principal                II and IV
Plus Fund L.P.

















</TABLE>












<PAGE>                     PART I

Item 1.  BUSINESS

      (a)  General  Development  of  Business.  Dean  Witter

Principal  Plus Fund L.P. (the "Partnership") is a  Delaware

limited  partnership  formed to engage  in  the  speculative

trading  of commodity futures contracts and other  commodity

interests, including, but not limited to, forward  contracts

on  foreign currencies and options on futures contracts  and

physical commodities.

     300,000 Units of limited partnership interest ("Units")

in   the   Partnership  were  registered   pursuant   to   a

Registration  Statement  on Form S-1  (File  No.  33-30891),

which became effective on October 26, 1989.  The offering of

units  was  underwritten on a "best efforts" basis  by  Dean

Witter  Reynolds  Inc.  ("DWR").  The Partnership's  General

Partner is Demeter Management Corporation ("Demeter").   DWR

and Demeter are wholly-owned subsidiaries of Morgan Stanley,

Dean  Witter,  Discover  & Co. ("MSDWD").   The  Partnership

commenced operations on February 14, 1990. 75,000 additional

Units   of  interest  in  the  Partnership  were  registered

pursuant  to a Registration Statement on Form S-1 (File  No.

33-95414) which became effective November 8, 1995.

      Through  July 31, 1997, the sole commodity broker  for

the  Partnership's transactions was DWR.  On July 31,  1997,

DWR  closed  the sale of its institutional futures  business

and  foreign  currency trading operations to  Carr  Futures,

Inc. ("Carr"), a subsidiary of Credit



<PAGE>

Agricole  Indosuez.   Following the sale,  Carr  became  the

clearing commodity broker for the Partnership's futures  and

futures   options  trades  and  the  counterparty   on   the

Partnership's  foreign currency trades.  DWR serves  as  the

non-clearing commodity broker for the Partnerships with Carr

providing   all  clearing  services  for  the  Partnerships'

transactions.

      The  Partnership's net asset value  per  unit,  as  of

December  31, 1997, was $1,707.59, representing an  increase

of  15.38  percent  from the net asset  value  per  unit  of

$1,479.85  at  December  31,  1996.   For  a  more  detailed

description  of the Partnership's business see  subparagraph

(c).

      (b)   Financial  Information about Industry  Segments.

The  Partnership's business comprises only one  segment  for

financial   reporting  purposes,  speculative   trading   of

commodity  futures  and  other  commodity  interests.    The

relevant financial information is presented in Items  6  and

8.

       (c)    Narrative   Description  of   Business.    The

Partnership  is  in the business of speculative  trading  in

commodity  futures contracts and other commodity  interests,

pursuant  to trading instructions provided by an independent

trading  advisor.   For  a  detailed  description   of   the

different

facets of the Partnership's business, see those portions  of

the  Partnership's Prospectus, dated November 8, 1995, filed

as  part  of  the Registration Statement on  Form  S-1  (see

"Documents  Incorporated by Reference" Page  1),  set  forth

below.

<PAGE>
  Facets of Business

      1.   Summary                    1.   "Summary  of  the
Prospectus"
                                      (Pages 2-14).

     2.  Commodity Markets         2.  "The Futures, Options
and
                                      Forwards Markets"
                                      (Pages 51-56).

     3.  Partnership's  Commodity   3.   "Trading  Policies"
(Page
        Trading  Arrangements and        62).  "The  Trading
Advisor"
        Policies                        (Page  58-62).  "The
Yield
                                      Pool" (Pages 63). "The
                                         Trading    Company"
(Pages
                                      63-64).

     4.  Management  of  the  Part-    4.   "The  Management
Agreement"
        nership                        (Pages 66-67).   "The
General Partner" (Pages
                                         48-50)   and   "The
Commodity
Broker"(Pages   64-65).   "The                       Limited
Partnership
Agreement" (Pages 70-73).

                                     5.    Taxation  of  the
                                     Partnership's        5.
                                     "Material       Federal
                                     Income
                                           Limited  Partners
                                     Tax     Aspects"    and
                                     "State     and    Local
                                     Income              Tax
                                     Aspects"   (Pages   77-
                                     86).

(d)    Financial  Information  About  Foreign  and  Domestic
Operations and
     Export Sales.

      The  Partnership has not engaged in any operations  in

foreign  countries;  however, the Partnership  (through  the

commodity brokers) enters into forward contract transactions

where foreign banks are the contracting party and trades  in

futures interests on foreign exchanges.








<PAGE>
Item 2.  PROPERTIES

      The  executive and administrative offices are  located

within the offices of DWR.  The DWR offices utilized by  the

Partnership  are  located at Two World  Trade  Center,  62nd

Floor, New York, NY 10048.

Item 3.  LEGAL PROCEEDINGS

      On  September 6, 10, and 20, 1996, and  on  March  13,

1997,  similar  purported class actions were  filed  in  the

Superior  Court of the State of California,  County  of  Los

Angeles, on behalf of all purchasers of interests in limited

partnership  commodity pools sold by DWR.  Named  defendants

include  DWR,  Demeter,  Dean Witter  Futures  and  Currency

Management, Inc. ("DWFCM"), MSDWD (all such parties referred

to  hereafter as the "Dean Witter Parties"), certain limited

partnership commodity pools of which Demeter is the  general

partner,  and  certain trading advisors to those  pools.  On

June  16, 1997, the plaintiffs in the above actions filed  a

consolidated  amended  complaint,  alleging,   among   other

things,   that  the  defendants  committed  fraud,   deceit,

negligent  misrepresentation,  various  violations  of   the

California  Corporations  Code,  intentional  and  negligent

breach  of  fiduciary duty, fraudulent and  unfair  business

practices, unjust enrichment, and conversion in the sale and

operation  of  the  various limited  partnerships  commodity

pools.   Similar purported class actions were also filed  on

September 18 and 20, 1996, in the Supreme Court of the State

of  New  York, New York County, and on November 14, 1996  in

the Superior Court of the State of Delaware, New

<PAGE>

Castle  County, against the Dean Witter Parties and  certain

trading advisors on behalf of all purchasers of interests in

various limited partnership commodity pools sold by  DWR.  A

consolidated and amended complaint in the action pending  in

the  Supreme  Court of the State of New York  was  filed  on

August  13,  1997,  alleging that the  defendants  committed

fraud,    breach   of   fiduciary   duty,   and    negligent

misrepresentation in the sale and operation of  the  various

limited partnership commodity pools.  On December 16,  1997,

upon  motion  of the plaintiffs, the action pending  in  the

Superior  Court  of  the State of Delaware  was  voluntarily

dismissed   without   prejudice.     The   complaints   seek

unspecified amounts of compensatory and punitive damages and

other  relief.   It  is  possible  that  additional  similar

actions  may  be  filed and that, in  the  course  of  these

actions,  other  parties could be added as defendants.   The

Dean  Witter Parties believe that they have strong  defenses

to,  and they will vigorously contest the actions.  Although

the   ultimate  outcome  of  legal  proceedings  cannot   be

predicted with certainty, it is the opinion of management of

the  Dean Witter Parties that the resolution of the  actions

will  not  have  a material adverse effect on the  financial

condition  or the results of operations of any of  the  Dean

Witter Parties.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.



<PAGE>

                          PART II

Item  5.  MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS  AND
RELATED
         SECURITY HOLDER MATTERS

      There is no established public trading market for  the

Units  of  Limited Partnership Interest in the  Partnership.

The  number  of holders of Units at December  31,  1997  was

approximately 3,394.  No distributions have been made by the

Partnership  since it commenced operations on  February  14,

1990.    Demeter   has  sole  discretion  to   decide   what

distributions,  if any, shall be made to  investors  in  the

Partnership.   No  determination has yet  been  made  as  to

future distributions.





























<PAGE>
<TABLE>


Item 6.  SELECTED FINANCIAL DATA (in dollars)

<CAPTION>

                                    For the Years Ended December 31,
                          1997         1996         1995          1994
1993

<S>                     <C>        <C>        <C> <C>         <C>
Total Revenues
(including   interest)10,461,123     (677,358)12,663,471   (2,601,083)
14,004,384

Net Income (Loss)   7,414,966  (3,646,323)   9,397,649      (6,379,229)
8,718,424

Net Income (Loss)
Per Unit (Limited
&  General  Partners)    227.74     (82.41)      238.12       (124.78)
150.06

Total   Assets        54,294,132    54,096,99242,581,908    66,189,009
80,515,592

Total Limited Partners'
Capital              51,607,436   50,688,703  39,547,302    61,577,369
76,096,133

Net Asset Value Per
Unit of Limited
Partnership  Interest  1,707.59     1,479.85    1,562.26      1,324.14
1,448.92









</TABLE>







<PAGE>
Item  7   MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL
CONDITION AND          RESULTS OF OPERATIONS

      Liquidity.  The Partnership's assets are deposited  in

separate  commodity trading accounts with DWR and Carr,  the

commodity brokers, and are used by the Partnership as margin

to engage in commodity futures, forward contracts on foreign

currencies  and other commodity interest trading.   DWR  and

Carr  hold such assets in either designated depositories  or

in  securities  approved  by the Commodity  Futures  Trading

Commission  ("CFTC") for investment of customer funds.   The

Partnership's  assets held by DWR and Carr may  be  used  as

margin  solely  for  the Partnership's trading.   Since  the

Partnership's sole purpose is to trade in commodity  futures

contracts and other commodity interests, it is expected that

the  Partnership will continue to own such liquid assets for

margin purposes.

      The  Partnership's  investment  in  commodity  futures

contracts and other commodity interests may be illiquid.  If

the  price for a futures contract for a particular commodity

has  increased or decreased by an amount equal to the "daily

limit", positions in the commodity can neither be taken  nor

liquidated unless traders are willing to effect trades at or

within   the   limit.    Commodity   futures   prices   have

occasionally  moved the daily limit for several  consecutive

days  with  little  or no trading.  Such  market  conditions

could prevent the Partnership from promptly liquidating  its

commodity futures positions.





<PAGE>

There  is  no  limitation on daily price  moves  in  trading

forward  contracts on foreign currencies.  The  markets  for

some  world  currencies  have low  trading  volume  and  are

illiquid  which may prevent the Partnership from trading  in

potentially  profitable markets or prevent  the  Partnership

from  promptly  liquidating unfavorable  positions  in  such

markets and subjecting it to substantial losses.

      Market  Risk.  The Partnership trades futures, options

and  forward  contracts  in interest rates,  stock  indices,

commodities   and  currencies.   In  entering   into   these

contracts  there  exists a risk to the  Partnership  (market

risk) that such contracts may be significantly influenced by

market   conditions,  such  as  interest  rate   volatility,

resulting  in  such contracts being less valuable.   If  the

markets  should  move  against all of the  futures  interest

positions held by the Partnership at the same time,  and  if

the  Trading Advisor were unable to offset futures  interest

positions of the Partnership, the Partnership could lose all

of  its assets and the Limited Partners would realize a 100%

loss.   The  Partnership has established  Trading  Policies,

which  include  standards for liquidity and  leverage  which

help  control  market  risk.  Both the Trading  Advisor  and

Demeter  monitor the Partnership's trading activities  on  a

daily  basis to ensure compliance with the Trading Policies.

Demeter  may  (under  terms  of  the  Management  Agreement)

override the trading instructions of the Trading Advisor  to

the extent necessary to comply



<PAGE>

with the Partnership's Trading Policies.

      Credit  Risk. In addition to market risk, in  entering

into  futures,  options and forward  contracts  there  is  a

credit  risk to the Partnership that the counterparty  on  a

contract  will  not be able to meet its obligations  to  the

Partnership.   The ultimate counterparty of the  Partnership

for  futures contracts traded in the United States and  most

foreign  exchanges on which the Partnership  trades  is  the

clearinghouse associated with such exchange.  In general,  a

clearinghouse  is backed by the membership of  the  exchange

and  will act in the event of non-performance by one of  its

members  or  one of its member's customers,  and,  as  such,

should  significantly reduce this credit risk.  For example,

a  clearinghouse may cover a default by (i) drawing  upon  a

defaulting  member's  mandatory  contributions  and/or  non-

defaulting   members'  contributions  to   a   clearinghouse

guarantee fund, established lines or letters of credit  with

banks, and/or the clearinghouse's surplus capital and  other

available assets of the exchange and clearinghouse, or  (ii)

assessing  its  members.   In cases  where  the  Partnership

trades on a foreign exchange where the clearinghouse is  not

funded or guaranteed by the membership or where the exchange

is  a  "principals'  market" in  which  performance  is  the

responsibility of the exchange member and not  the  exchange

or a clearinghouse, or when the Partnership enters into off-





<PAGE>

exchange contracts with a counterparty, the sole recourse of

the  Partnership  will  be the clearinghouse,  the  exchange

member  or  the off-exchange contract counterparty,  as  the

case may be.

      There  can  be  no  assurance  that  a  clearinghouse,

exchange  or other exchange member will meet its obligations

to  the  Partnership, and the Partnership is not indemnified

against  a default by such parties from Demeter or MSDWD  or

DWR.   Further, the law is unclear as to whether a commodity

broker has any obligation to protect its customers from loss

in the event of an exchange, clearinghouse or other exchange

member   default  on  trades  effected  for   the   broker's

customers;  any such obligation on the part  of  the  broker

appears even less clear where the default occurs in a non-US

jurisdiction.

       Demeter  deals  with  these  credit  risks   of   all

partnerships  for  which it serves  as  General  Partner  in

several ways.  First, it monitors each partnership's  credit

exposure to each exchange on a daily basis, calculating  not

only  the  amount  of margin required for it  but  also  the

amount  of  its unrealized gains at each exchange,  if  any.

The  Commodity Brokers inform each partnership, as with  all

their customers, of its net margin requirements for all  its

existing  open positions, but do not break that  net  figure

down, exchange by exchange.  Demeter, however, has installed

a  system  which  permits it to monitor  each  partnership's

potential  margin liability, exchange by exchange.   Demeter

is   then  able  to  monitor  the  individual  partnership's

potential net credit exposure to

<PAGE>

each exchange by adding the unrealized trading gains on that

exchange,  if  any,  to the partnership's  margin  liability

thereon.

       Second,  as  discussed  earlier,  each  partnership's

trading policies limit the amount of partnership Net  Assets

that can be committed at any given time to futures contracts

and  require,  in  addition,  a certain  minimum  amount  of

diversification in the partnership's trading,  usually  over

several different products.  One of the aims of such trading

policies  has  been  to reduce the credit  exposure  of  any

partnership  to any single exchange and, historically,  such

partnership exposure has typically amounted to only a  small

percentage of its total Net Assets.  On those relatively few

occasions where a partnership's credit exposure has  climbed

above that level, Demeter has dealt with the situations on a

case by case basis, carefully weighing whether the increased

level  of  credit  exposure remained  appropriate.   Demeter

expects  to  continue  to deal with  such  situations  in  a

similar manner in the future.

     Third, Demeter has secured, with respect to Carr acting

as  the clearing broker for the partnerships, a guarantee by

Credit  Agricole Indosuez, Carr's parent, of the payment  of

the  "net  liquidating value" of the transactions  (futures,

options   and   forward  contracts)  in  each  partnership's

account.  As of December 31, 1997, Credit Agricole Indosuez'

total  capital  was over $3.25 billion and it  is  currently

rated AA2 by Moody's.



<PAGE>

       With   respect  to  forward  contract  trading,   the

partnerships  trade  with  only those  counterparties  which

Demeter,   together  with  DWR,  have   determined   to   be

creditworthy.  At the date of this filing, the  partnerships

deal  only  with  Carr  as  their  counterparty  on  forward

contracts.  The guarantee by Carr's parent, discussed above,

covers these forward contracts.

      See  "Financial Instruments" under Notes to  Financial

Statements  in  the  Partnership's  1997  Annual  Report  to

Partners, incorporated by reference in this Form 10-K.

      Capital Resources.  The Partnership does not have, nor

does it expect to have, any capital assets.  Redemptions  of

additional  Units  of Limited Partnership  Interest  in  the

future  will  affect  the  amount  of  funds  available  for

investments  in subsequent periods.  As redemptions  are  at

the  discretion of Limited Partners, it is not  possible  to

estimate  the  amount  and therefore the  impact  of  future

redemptions.

      Results  of Operations.  As of December 31, 1997,  the

Partnership's total capital was $52,945,862, an increase  of

$1,097,049   from   the  Partnership's  total   capital   of

$51,848,813,  at  December 31, 1996.   For  the  year  ended

December  31, 1997, the Partnership generated net income  of

$7,414,966 and total redemptions aggregated $6,317,917.

     For the year ended December 31, 1997, the Partnership's

total  trading  revenues  including  interest  income   were

$8,529,013.  Gains  recorded  on  the  Yield  Pool   totaled

$1,932,110.   The Partnership's total

<PAGE>

expenses  for  the  year were $2,956,963, resulting  in  net

income before minority interest of $7,504,160.  The minority

interest in such gains was $89,194, resulting in net  income

of   $7,414,966  for  the  Partnership.   The  value  of  an

individual unit in the Partnership increased from  $1,479.85

at December 31, 1996 to $1,707.59 at December 31, 1997.

      As  of  December  31,  1996, the  Partnership's  total

capital was $51,848,813, an increase of $11,076,869 from the

Partnership's total capital of $40,771,944 at  December  31,

1995.  For the year ended December 31, 1996, the Partnership

incurred  a  net  loss  of $3,646,323,  total  subscriptions

aggregated  $21,697,912,  and total  redemptions  aggregated

$6,974,720.

     For the year ended December 31, 1996, the Partnership's

total   trading  revenues  net  of  interest   income   were

$1,465,184.   Losses  recorded on  the  Yield  Pool  totaled

$2,142,542.  The Partnership's total expenses for  the  year

were  $3,061,681,  resulting in a net loss  before  minority

interest  of  $3,739,039.   The minority  interest  in  such

losses  was  $92,716, resulting in a net loss of  $3,646,323

for the Partnership.  The value of an individual unit in the

Partnership decreased from $1,562.26 at December 31, 1995 to

$1,479.85 at December 31, 1996.

      As  of  December  31,  1995, the  Partnership's  total

capital was $40,771,944, a decrease of $21,842,276 from  the

Partnership's total capital of $62,614,220 at  December  31,

1994.  For the year ended December



<PAGE>

31, 1995, the Partnership generated net income of $9,397,649

and total redemptions aggregated $31,239,925.

     For the year ended December 31, 1995, the Partnership's

total  trading  revenues  including  interest  income   were

$12,536,481  and realized gains on Yield Pool sales  totaled

$126,990.   The Partnership's total expenses  for  the  year

were  $3,099,818,  resulting in net income  before  minority

interest  of  $9,563,653.   The minority  interest  in  such

income  was  $166,004, resulting in net income of $9,397,649

for  the Partnership. The value of an individual unit in the

Partnership increased from $1,324.14 at December 31, 1994 to

$1,562.26 at December 31, 1995.

     The Partnership's overall performance record represents

varied  results  of trading in different commodity  markets.

For  a further description of trading results, refer to  the

letter  to  the  Limited Partners in the  accompanying  1997

Annual Report to Partners, incorporated by reference in this

Form 10-K.  The Partnership's gains and losses are allocated

among its Limited Partners for income tax purposes.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The  information required by this Item appears in  the

attached 1997

Annual  Report  to Limited Partners and is  incorporated  by

reference in this Annual Report on Form 10-K.


Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

<PAGE>

                          PART III

Item  10.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND
CONTROL
          PERSONS OF THE REGISTRANT

General Partner

      Demeter, a Delaware corporation, was formed on  August

18,  1977  to  act  as  a  commodity pool  operator  and  is

registered  with the CFTC as a commodity pool  operator  and

currently  is  a member of the National Futures  Association

("NFA") in such capacity.  Demeter is wholly-owned by  MSDWD

and is an affiliate of DWR.  MSDWD, DWR and Demeter may each

be  deemed  to  be  "promoters" and/or  a  "parent"  of  the

Partnership  within  the meaning of the  federal  securities

laws.

      On  July  21,  1997,  MSDWD, the sole  shareholder  of

Demeter,  appointed a new Board of Directors  consisting  of

Richard M. DeMartini, Mark J. Hawley, Lawrence Volpe, Joseph

G. Siniscalchi, Edward C. Oelsner III, and Robert E. Murray.

Dean Witter Reynolds Inc.

      DWR is a financial services company which provides  to

its individual, corporate and institutional clients services

as  a broker in securities and commodity interest contracts,

a  dealer in corporate, municipal and government securities,

an  investment  adviser and an agent in  the  sale  of  life

insurance and various other products and services.  DWR is a

member  firm  of the New York Stock Exchange,  the  American

Stock



<PAGE>

Exchange,  the  Chicago Board Options  Exchange,  and  other

major securities exchanges.

     DWR is registered with the CFTC as a futures commission

merchant and is a member of the NFA in such capacity. As  of

December  31, 1997, DWR is servicing its clients  through  a

network   of   approximately   401   branch   offices   with

approximately 10,155 account executives servicing individual

and institutional client accounts.

Directors and Officers of the General Partner

      The  directors and officers of Demeter as of  December

31, 1997 are as follows:

      Richard M. DeMartini, age 45, is the Chairman  of  the

Board  and  a  Director of Demeter.  Mr. DeMartini  is  also

Chairman of the Board and a Director of Dean Witter  Futures

&  Currency  Management Inc. ("DWFCM").   Mr.  DeMartini  is

president  and chief operating officer of MSDWD's Individual

Asset  Management Group.  He was named to this  position  in

May of 1997 and is responsible for Dean Witter InterCapital,

Van  Kampen  American Capital, insurance  services,  managed

futures,  unit  trust, investment consulting services,  Dean

Witter   Realty,  and  NOVUS  Financial  Corporation.    Mr.

DeMartini  is a member of the MSDWD management committee,  a

director of the InterCapital funds, a trustee of the  TCW/DW

funds  and a trustee of the Van Kampen American Capital  and

Morgan  Stanley retail funds.  Mr. DeMartini has  been  with

Dean  Witter his entire career, joining the firm in 1975  as

an account executive.  He

<PAGE>

served  as a branch manager, regional director and  national

sales  director, before being appointed president and  chief

operating  officer of the Dean Witter Consumer Markets.   In

1988  he was named president and chief operating officer  of

Sears'  Consumer  Banking Division and in  January  1989  he

became  president and chief operating officer of Dean Witter

Capital.  Mr. DeMartini has served as chairman of the  board

of  the  Nasdaq Stock Market, Inc. and vice chairman of  the

board  of  the  National Association of Securities  Dealers,

Inc.   A  native  of  San Francisco, Mr. DeMartini  holds  a

bachelor's   degree  in  marketing  from  San  Diego   State

University.

      Mark J. Hawley, age 54, is President and a Director of

Demeter.   Mr.  Hawley is also President and a  Director  of

DWFCM.   Mr.  Hawley joined DWR in February 1989  as  Senior

Vice President and is currently the Executive Vice President

and Director of DWR's Managed Futures Department.  From 1978

to  1989,  Mr. Hawley was a member of the senior  management

team  at  Heinold Asset Management, Inc.,  a  CPO,  and  was

responsible  for  a  variety of projects in  public  futures

funds.   From 1972 to 1978, Mr. Hawley was a Vice  President

in charge of institutional block trading for the Mid-West at

Kuhn Loeb & Company.

      Lawrence  Volpe, age 50, is a Director of Demeter  and

DWFCM.  Mr. Volpe joined DWR as a Senior Vice President  and

Controller  in  September 1983, and  currently  holds  those

positions.   From  July  1979  to  September  1983,  he  was

associated with E.F. Hutton & Company Inc. and prior to his

<PAGE>

departure,  held the positions of First Vice  President  and

Assistant  Controller.   From 1970  to  July  1979,  he  was

associated  with  Arthur Anderson & Co.  and  prior  to  his

departure served as audit manager in the financial  services

division.

      Joseph  G.  Siniscalchi, age  52,  is  a  Director  of

Demeter.  Mr. Siniscalchi joined DWR in July 1984 as a First

Vice President, Director of General Accounting and served as

a  Senior Vice President and Controller for DWR's Securities

division  through  1997.   He is  currently  Executive  Vice

President  and Director of the Operations Division  of  DWR.

From  February  1980  to  July  1984,  Mr.  Siniscalchi  was

Director  of  Internal Audit at Lehman Brothers  Kuhn  Loeb,

Inc.

      Edward  C.  Oelsner, III, age 55,  is  a  Director  of

Demeter.   Mr.  Oelsner  is  currently  an  Executive   Vice

President and head of the Product Development Group at  Dean

Witter  InterCapital Inc., an affiliate of DWR. Mr.  Oelsner

joined  DWR  in  1981  as  a  Managing  Director  in   DWR's

Investment  Banking Department specializing in  coverage  of

regulated  industries and, subsequently, served as  head  of

the  DWR  Retail Products Group.  Prior to joining DWR,  Mr.

Oelsner held positions at The First Boston Corporation as  a

member  of  the Research and Investment Banking  Departments

from  1967  to  1981.  Mr. Oelsner received  his  M.B.A.  in

Finance  from  the  Columbia University Graduate  School  of

Business  in  1966  and an A.B. in Politics  from  Princeton

University in 1964.



<PAGE>

      Robert  E.  Murray, age 37, is a Director of  Demeter.

Mr.  Murray  is  also a Director of DWFCM.   Mr.  Murray  is

currently  a Senior Vice President of DWR's Managed  Futures

Department  and  is  the  Senior Administrative  Officer  of

DWFCM.   Mr. Murray began his career at DWR in 1984  and  is

currently  the  Director  of  Product  Development  for  the

Managed  Futures  Department.  He  is  responsible  for  the

development   and   maintenance  of  the  proprietary   Fund

Management   System  utilized  by  DWFCM  and   Demeter   in

organizing  information and producing reports for monitoring

clients'  accounts.   Mr.  Murray  currently  serves  as   a

Director  of  the  Managed  Funds Association.   Mr.  Murray

graduated from Geneseo State University in May 1983  with  a

B.A. degree in Finance.

      Patti  L. Behnke, age 37, is Vice President and  Chief

Financial  Officer  of Demeter.  Ms. Behnke  joined  DWR  in

April   1991  as  Assistant  Vice  President  of   Financial

Reporting  and  is  currently a  First  Vice  President  and

Director   of   Financial  Reporting  and  Managed   Futures

Accounting in the Individual Asset Management Group.   Prior

to  joining  DWR,  Ms. Behnke held positions  of  increasing

responsibility at L.F. Rothschild & Co. and Carteret Savings

Bank.  Ms. Behnke began her career at Arthur Anderson & Co.,

where she was employed in the audit division from 1982-1986.

She  is a member of the AICPA and the New York State Society

of Certified Public Accountants.





<PAGE>

  Item 11.  EXECUTIVE COMPENSATION

       The   Partnership  has  no  directors  and  executive

officers.   As  a limited partnership, the business  of  the

Partnership is managed by Demeter, which is responsible  for

the   administration  of  the  business   affairs   of   the

Partnership but receives no compensation for such services.

Item  12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL  OWNERS

AND MANAGEMENT

      (a)  Security Ownership of Certain Beneficial Owners -

As  of December 31, 1997, there were no persons known to  be

beneficial  owners of more than 5 percent of  the  units  of

Limited Partnership Interest in the Partnership.

     (b)  Security Ownership of Management - At December 31,

1996,   Demeter  owned  783  Units  of  General  Partnership

Interest  representing  a  2.53  percent  interest  in   the

Partnership.

     (c)  Changes in Control - None


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Refer  to  Note  2  - "Related Party Transactions"  of

"Notes   to  Consolidated  Financial  Statements",  in   the

accompanying 1997 Annual Report to Partners, incorporated by

reference  in  this  Form  10-K.  In  its  capacity  as  the

Partnership's   retail   commodity  broker,   DWR   received

commodity   brokerage  fees  (paid  and   accrued   by   the

Partnership)  of $2,201,830 for the year ended December  31,

1997.


<PAGE>
                          PART IV

Item  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,   AND

REPORTS ON FORM 8-K

(a)  1.  Listing of Financial Statements

      The  following  financial  statements  and  report  of

independent  public  accountants,  all  appearing   in   the

accompanying   1997   Annual   Report   to   Partners,   are

incorporated by reference in this Form 10-K:

          -     Report of Deloitte & Touche LLP, independent
          auditors,  for the years ended December 31,  1997,
          1996 and 1995.

          -       Consolidated   Statements   of   Financial
          Condition as of December 31, 1997 and 1996.

          -      Consolidated   Statements  of   Operations,
          Changes  in Partners' Capital, and Cash Flows  for
          the years ended December 31, 1997, 1996 and 1995.

          -    Notes to Consolidated Financial Statements.

      With  the  exception of the aforementioned information

and  the information incorporated in Items 7, 8 and 13,  the

1997  Annual  Report to Partners is not deemed to  be  filed

with this report.

     2.  Listing of Financial Statement Schedules

      No  financial statement schedules are required  to  be

filed with this report.

(b)  Reports on Form 8-K

      No  reports  on  Form  8-K  have  been  filed  by  the

Partnership during the last quarter of the period covered by

this report.

(c)  Exhibits

     Refer to Exhibit Index on Page E-1.



<PAGE>
                           SIGNATURES

     Pursuant to the requirement of Sections 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this  report  to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                               DEAN   WITTER
                         PRINCIPAL PLUS FUND L.P.

(Registrant)

                                               BY:   Demeter
                         Management Corporation,
                                                       General
                              Partner

March 24, 1998           BY: /s/ Mark J. Hawley
                                 Mark J. Hawley, Director and
                                President

     Pursuant to the requirements of the Securities Exchange Act
of  1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

Demeter Management Corporation.

BY: /s/  Mark J. Hawley                                March 24,
1998
        Mark J. Hawley, Director and
          President

    /s/  Richard M. DeMartini                          March 24,
1998
        Richard M. DeMartini, Director
          and Chairman of the Board


    /s/  Lawrence Volpe                                March 24,
1998
        Lawrence Volpe, Director


    /s/  Joseph G. Siniscalchi                         March 24,
1998
        Joseph G. Siniscalchi, Director


    /s/  Edward C. Oelsner III                         March 24,
1998
        Edward C. Oelsner III, Director


    /s/  Robert E. Murray                              March 24,
1998         Robert E. Murray, Director


    /s/  Patti L. Behnke                               March 24,
1998
        Patti L. Behnke, Chief Financial
          Officer and Principal Accounting
          Officer

<PAGE>

                         EXHIBIT INDEX

ITEM                                                      METHOD
OF FILING

-3.  Amended and Restated Limited
     Partnership Agreement of
     the Partnership, dated as of
     August 29, 1995.
                                                      (1)
-10. Amended and Restated Management
     Agreement among the

Partnership, Demeter and RXR, Inc.
                                                     dated as of
     December 29, 1995.                               (2)

-10. Amended and Restated Customer
     Agreement between the Partnership
     and DWR, dated as of December 29, 1995.          (3)

-13. December 31, 1997 Annual Report to Limited Partners.   (4)



(1)  Incorporated by reference to Exhibit 3.01 and Exhibit 3.02
of the    Partnership's Registration Statement (File No. 33-
95414) on Form S-1.

(2)   Incorporated  by  reference to Exhibit  10.02  of  the
Partnership's
   Registration Statement (File No. 33-95414) on Form S-1.

(3)   Incorporated  by  reference to Exhibit  10.01  of  the
Partnership's
   Registration Statement (File No. 33-95414) on Form S-1.

(4)  Filed herewith.



<PAGE>

Principal
Plus
Fund December 31, 1997
Annual Report
                                                      [LOGO] DEAN WITTER

<PAGE>

DEAN WITTER
Two World Trade Center
62nd Floor
New York, NY 10048
Telephone (212) 392-8899

PRINCIPAL PLUS FUND
ANNUAL REPORT
1997

Dear Limited Partner:

This marks the eighth annual report for the Dean Witter Principal Plus Fund
L.P. (the "Fund"). The Fund began 1997 trading at a Net Asset Value per Unit of
$1,479.85 and increased by 15.38% to close the year at $1,707.59. A review of
trading results for the year is provided in the Annual Report of the Trading
Manager located on the next page of this report.

Should you have any questions concerning this report, please feel free to
contact Demeter Management Corporation at Two World Trade Center, 62nd Floor,
New York, NY 10048 or your Dean Witter Account Executive.

I hereby affirm, that to the best of my knowledge and belief, the information
contained in this report is accurate and complete. Past performance is not a
guarantee of future results.

    Sincerely,

    /s/ Mark J. Hawley

    Mark J. Hawley
    President
    Demeter Management Corporation
    General Partner
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
ANNUAL REPORT OF THE TRADING MANAGER

Encouraged by the U.S. economy's ability to walk the narrow tight rope of
sustainable growth with low inflation, Principal Plus Fund continued its record
of absolute returns, with performance totaling 11.2% on a mark to market basis
and 15.4% on a redemption value basis for 1997. Each of the Fund's major
sectors, including alternative equity, fixed income, and global futures
reported gains for the year.

The first quarter was marked by an abrupt reversal in the world's equity
futures markets, sharply higher interest rates, falling energy prices and
continued strength in the U.S. dollar against the world's major currencies. The
Fund maintained long U.S. dollar positions throughout much of the quarter which
contributed to positive performance, despite severe volatility in non-U.S.
fixed income futures markets in January and February. The energy and
agricultural components became active mid-way through the quarter, as an
unusually warm winter had trade hedgers jockeying for position. The Fund was
short crude oil and natural gas, and long corn and cattle contracts which
proved to be a profitable spread position.

In March, the Fund's return was daunted by sharp declines in both S&P 500 and
U.S. Treasury futures markets, but by month-end the Fund had recovered, gaining
over 1.9% for the quarter.

The Fund was rebalanced in April, reducing exposure in the currency sector due
to increased volatility and concerns that the dollar's strength may be waning.
The U.S. equity model turned positive mid-way through the quarter, setting the
stage for continued profitability from the Fund's long positions in S&P 500
futures. Advances in U.S. stock and bond prices, and strong performance in
Australian fixed income futures markets positively impacted performance late in
the second quarter. In the U.S., the economic data indicated continued growth
with no sign of inflation, propelling both stock and bond prices to new high
ground for the year. A round of interest rate cuts in Australia directly
benefited the Fund's long exposure in the 3 and 10 year Australian futures, as
well as the 90-day Bank bill futures.

With the exception of profitable short positions in corn and soybean futures,
most gains in the quarter came from the financial sector. Italian and Swiss
interest rate reductions and the resulting rise in bond futures prices added to
profitability, capping off a 2.4% advance for the quarter.

In July, each sector, including U.S. equity, fixed income, and global futures,
rallied sharply despite a
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
ANNUAL REPORT OF THE TRADING MANAGER--(CONCLUDED)

rate hike from the U.S. Federal Reserve Bank. With the economy's growth on
track and inflation data subdued, the U.S. equity and fixed income markets
moved sharply higher, the U.S. dollar strengthened and European interest rates
declined creating a plethora of profitable opportunities for the Fund. Although
some profits were given back in August, the month of September saw the Fund
regain its momentum, closing the quarter with a gain of 5.9%.

The start of the fourth quarter of 1997 was reminiscent of 1987, as the world's
equity markets sold off sharply in the face of a growing financial crisis in
Southeast Asia. Increased volatility negatively impacted performance, as short-
term hedging strategies were ineffectual. By year-end, the S&P 500 was back
near its all time highs. The bond component held five-year average maturity
throughout the period which added slightly to total performance as interest
rates continued to decline. The global futures component turned in a profitable
quarter, due mainly to short energy and long U.S. dollar positions. In total,
the Fund advanced 0.9% for the quarter.

At the start of the New Year, the Fund was partially hedged in its U.S. stock
index and bond futures component, and favors global fixed income futures
investments. In the foreign exchange and commodity sectors, the Fund was fully
invested and will continue to benefit from strength in the U.S. dollar and a
deflationary commodity price environment.

RXR, Inc.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
INDEPENDENT AUDITORS' REPORT

The Limited Partners and the General Partner:

We have audited the accompanying consolidated statements of financial condition
of Dean Witter Principal Plus Fund L.P. and subsidiary (the "Partnership") as
of December 31, 1997 and 1996 and the related consolidated statements of
operations, changes in partners' capital, and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Dean Witter Principal Plus Fund
L.P. and subsidiary as of December 31, 1997 and 1996 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

February 17, 1998
New York, New York
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                                    ----------------------
                                                       1997        1996
                                                    ----------  ----------
                                                        $           $
<S>                                                 <C>         <C>
                                 ASSETS
Equity in Commodity futures trading accounts:
 Cash                                                8,956,497   6,625,325
 Net unrealized gain on open contracts                 779,432     197,384
 Net option premiums                                  (719,950)        --
                                                    ----------  ----------
 Total Trading Equity                                9,015,979   6,822,709
Investment in Zero-Coupon U.S. Treasury Securities  45,239,044  47,247,655
Interest receivable (DWR)                               39,109      26,628
                                                    ----------  ----------
 Total Assets                                       54,294,132  54,096,992
                                                    ==========  ==========
                    LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
 Redemptions payable                                   723,025   1,657,380
 Accrued brokerage fee (DWR)                           181,150     186,774
 Accrued administrative expenses                       159,640     203,250
 Accrued management fee                                 45,287      46,693
 Accrued transaction fees and costs                        --        4,108
                                                    ----------  ----------
 Total Liabilities                                   1,109,102   2,098,205
                                                    ----------  ----------
Minority interest                                      239,168     149,974
                                                    ----------  ----------
PARTNERS' CAPITAL
 Limited Partners (30,223.237 and 34,253.485 Units,
   respectively)                                    51,607,436  50,688,703
 General Partner (783 Units)                         1,338,426   1,160,110
                                                    ----------  ----------
 Total Partners' Capital                            52,945,862  51,848,813
                                                    ----------  ----------
 Total Liabilities and Partners' Capital            54,294,132  54,096,992
                                                    ==========  ==========
NET ASSET VALUE PER UNIT                              1,707.59    1,479.85
                                                    ==========  ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                 FOR THE YEARS
                                                     ENDED
                                                  DECEMBER 31,
                                        ----------------------------------
                                           1997        1996        1995
                                        ----------  ----------  ----------
                                            $           $           $
<S>                                     <C>         <C>         <C>
REVENUES
Trading Profit (Loss):
 Realized                                4,948,081    (989,467)  8,168,790
 Net change in unrealized                  582,048    (590,345)    498,189
                                        ----------  ----------  ----------
  Total Trading Results                  5,530,129  (1,579,812)  8,666,979
                                        ----------  ----------  ----------
Interest income                          2,998,884   3,044,996   3,869,502
Change in value of Yield Pool            1,932,110  (2,142,542)    126,990
                                        ----------  ----------  ----------
  Total Revenues                        10,461,123    (677,358) 12,663,471
                                        ----------  ----------  ----------
EXPENSES
Brokerage fees (DWR)                     2,201,830   2,270,318   2,326,127
Management fee                             547,058     561,862     573,964
Administrative expenses                    110,000      81,000     104,000
Transaction fees and costs                  98,075     148,501      95,727
                                        ----------  ----------  ----------
  Total Expenses                         2,956,963   3,061,681   3,099,818
                                        ----------  ----------  ----------
INCOME (LOSS) BEFORE MINORITY INTEREST   7,504,160  (3,739,039)  9,563,653
Minority interest in (income) loss         (89,194)     92,716    (166,004)
                                        ----------  ----------  ----------
NET INCOME (LOSS)                        7,414,966  (3,646,323)  9,397,649
                                        ==========  ==========  ==========
NET INCOME (LOSS) ALLOCATION:
Limited Partners                         7,236,650  (3,581,791)  9,209,858
General Partner                            178,316     (64,532)    187,791
NET INCOME (LOSS) PER UNIT:
Limited Partners                            227.74      (82.41)     238.12
General Partner                             227.74      (82.41)     238.12
</TABLE>

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                              UNITS OF
                             PARTNERSHIP    LIMITED     GENERAL
                              INTEREST     PARTNERS     PARTNER      TOTAL
                             -----------  -----------  ---------  -----------
                                               $           $           $
<S>                          <C>          <C>          <C>        <C>
Partners' Capital, December
31, 1994                      47,286.564   61,577,369  1,036,851   62,614,220
Net Income                           --     9,209,858    187,791    9,397,649
Redemptions                  (21,188.596) (31,239,925)       --   (31,239,925)
                             -----------  -----------  ---------  -----------
Partners' Capital, December
31, 1995                      26,097.968   39,547,302  1,224,642   40,771,944
Offering of Units             13,844.606   21,697,912        --    21,697,912
Net Loss                             --    (3,581,791)   (64,532)  (3,646,323)
Redemptions                   (4,906.089)  (6,974,720)       --    (6,974,720)
                             -----------  -----------  ---------  -----------
Partners' Capital, December
31, 1996                      35,036.485   50,688,703  1,160,110   51,848,813
Net Income                           --     7,236,650    178,316    7,414,966
Redemptions                   (4,030.248)  (6,317,917)       --    (6,317,917)
                             -----------  -----------  ---------  -----------
Partners' Capital, December
31, 1997                      31,006.237   51,607,436  1,338,426   52,945,862
                             ===========  ===========  =========  ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                   FOR THE YEARS
                                                       ENDED
                                                    DECEMBER 31,
                                         ------------------------------------
                                            1997        1996         1995
                                         ----------  -----------  -----------
                                             $            $            $
<S>                                      <C>         <C>          <C>
CASH FLOWS FROM
  OPERATING ACTIVITIES
Net income (loss)                         7,414,966   (3,646,323)   9,397,649
Noncash item included in net income
  (loss):
 Net change in unrealized                  (582,048)     590,345     (498,189)
(Increase) decrease in
  operating assets:
 Net option premiums                        719,950          --      (186,000)
 Investment in Zero Coupon U.S. Treasury
   Securities                             2,008,611  (47,247,655)  60,143,331
 Interest receivable (DWR)                  (12,481)       2,284       (1,823)
 Investment in U.S. Treasury Bills              --    32,867,974  (32,867,974)
Increase (decrease) in
  operating liabilities:
 Accrued brokerage fee (DWR)                 (5,624)      45,643      (78,824)
 Accrued administrative expenses            (43,610)     (37,476)      40,302
 Accrued management fee                      (1,406)      11,410      (19,706)
 Accrued transaction fees and costs          (4,108)       2,331         (373)
                                         ----------  -----------  -----------
Net cash provided by (used
  for) operating activities               9,494,250  (17,411,467)  35,928,393
                                         ----------  -----------  -----------
CASH FLOWS FROM
  FINANCING ACTIVITIES
Minority interest                            89,194      (92,715)     166,004
Offering of Units                               --    21,697,912          --
Increase (decrease) in
  redemptions payable                      (934,355)     509,022   (1,872,228)
Redemptions of units                     (6,317,917)  (6,974,720) (31,239,925)
                                         ----------  -----------  -----------
Net cash provided by (used
  for) financing activities              (7,163,078)  15,139,499  (32,946,149)
                                         ----------  -----------  -----------
Net increase (decrease) in cash           2,331,172   (2,271,968)   2,982,244
Balance at beginning of
  period                                  6,625,325    8,897,293    5,915,049
                                         ----------  -----------  -----------
Balance at end of period                  8,956,497    6,625,325    8,897,293
                                         ==========  ===========  ===========
</TABLE>
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--Dean Witter Principal Plus Fund L.P. (the "Partnership") is a
limited partnership organized to engage in the speculative trading of commodity
futures contracts, commodity options contracts and forward contracts on foreign
currencies. Prior to February 1, 1996 the Partnership's objective was to
achieve long-term appreciation while assuring investors at least a 4% compound
annual rate of return over approximately five and one-half years from February
14, 1990 (the "Guarantee Period"). The Partnership initially invested
approximately 80% of the Partnership's assets in zero-coupon U.S. Treasury
Securities (the "Yield Pool") to accomplish this objective. Subsequent to the
August 1995 maturity of the U.S. Treasury Zero Coupon Securities, the proceeds
were invested in U.S. Treasury Bills. In August 1995, the Guaranteed Yield was
extended through January 31, 1996 during which time additional Units of the
Partnership were registered and offered to the public (see Offering of Units).

Effective February 1, 1996 the Partnership's objective was changed to achieve
long-term appreciation while assuring investors at least a 3% compound annual
rate of return over approximately seven and one-half years from February 1,
1996 to August 31, 2003. At August 31, 2003, which is the Partnership's
"Guaranteed Redemption Date," the Net Asset Value is guaranteed to be at least
$1,961.00 per Unit. At the February 1, 1996 closing date of the Offering, the
Partnership again invested approximately 80% of its total assets in Zero-Coupon
U.S. Treasury Securities to accomplish this objective. The Partnership's
remaining assets have been contributed to its subsidiary, Dean Witter Principal
Plus Fund Management L.P. (the "Trading Company"), which was established solely
to trade in commodity interests on behalf of the Partnership.

The general partner for the Partnership is Demeter Management Corporation
("Demeter"). Demeter is a wholly-owned subsidiary of Morgan Stanley, Dean
Witter, Discover & Co. ("MSDWD").

On May 31, 1997, Morgan Stanley Group Inc. was merged with and into Dean
Witter, Discover & Co. ("DWD"). At the time DWD changed its corporate name to
Morgan Stanley, Dean Witter, Discover & Co.

Demeter has retained RXR, Inc. ("RXR") as the trading manager of the Trading
Company.

Through July 31, 1997, the sole commodity broker for the Partnership's
transactions was Dean Witter
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)

Reynolds Inc. ("DWR"), also a subsidiary of MSDWD. On July 31, 1997, DWR closed
the sale of its institutional futures business and foreign currency trading
operations to Carr Futures, Inc. ("Carr"), a subsidiary of Credit Agricole
Indosuez. Following the sale, Carr became the clearing commodity broker for the
Partnership's futures and futures options trades and the counterparty on the
Partnership's foreign currency trades. DWR will continue to serve as the non-
clearing commodity broker for the Partnership with Carr providing all clearing
services for the Partnership's transactions.

Demeter is required to maintain a 1% minimum interest in the equity of the
Partnership and income (losses) are shared by Demeter and the Limited Partners
based upon their proportional ownership interests.

OFFERING OF UNITS--During the period from November 11, 1995 through January 31,
1996 additional Units were offered to the public at a price equal to 100% of
the Net Asset Value as of the close of business on the last day of the month
immediately preceding the February 1, 1996 closing date of the offering.

BASIS OF ACCOUNTING--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts in the financial statements.

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the
accounts of the Partnership and the Trading Company. All intercompany balances
have been eliminated.

The ownership by Demeter in the Trading Company represents a minority interest
in the Partnership. Demeter's share of the Trading Company's profits and losses
is deducted from consolidated results of operations.

REVENUE RECOGNITION--The Yield Pool is valued at the lesser of cost plus
accreted interest or market value.

The following information pertains to the Yield Pool at December 31, 1997 and
1996:
<TABLE>
<CAPTION>
                                             1997       1996
                                          ---------- ----------
<S>                                       <C>        <C>
                                              $          $
Year to Date Accreted Interest Income      2,605,588  2,726,002
Cost of Yield Pool at year-end            40,837,809 46,928,070
Accreted Interest Receivable at year-end   4,611,667  2,462,127
Market Value of Yield Pool at year-end    45,239,044 47,247,655
</TABLE>
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)


Commodity futures contracts, commodity options contracts and forward contracts
on foreign currencies are open commitments until settlement date. They are
valued at market and the resulting unrealized gains and losses are reflected in
income.

Monthly, DWR pays interest income based upon 90% of the Trading Company's
average daily Net Assets for the month at a rate equal to a prevailing rate on
U.S. Treasury Bills. For purposes of such interest payments, Net Assets do not
include monies due the Trading Company on forward contracts and other commodity
interests, but not actually received.

NET INCOME (LOSS) PER UNIT--Net income (loss) per Unit is computed using the
weighted average number of units outstanding during the period.

EQUITY IN COMMODITY FUTURES TRADING ACCOUNTS--The Partnership's asset "Equity
in Commodity futures trading accounts" consists of cash on deposit at DWR and
Carr to be used as margin for trading and the net asset or liability related to
unrealized gains or losses on open contracts and the net option premiums paid
and/or received. The asset or liability related to the unrealized gains or
losses on forward contracts is presented as a net amount in each period due to
master netting agreements.

BROKERAGE FEES AND RELATED TRANSACTION FEES AND COSTS--The monthly brokerage
fee is equal to 1/3 of 1% per month of the Partnership's adjusted month-end Net
Assets. Transaction fees and costs are accrued on a half-turn basis. In 1997,
the brokerage fee charged was the equivalent of a roundturn commission charge
of approximately $112 per contract traded.

OPERATING EXPENSES--The Partnership bears all operating expenses related to its
trading activities. These include filing fees, clerical, administrative,
auditing, accounting, mailing, printing and other incidental operating expenses
as permitted by the Limited Partnership Agreement. In addition, the Partnership
incurs a monthly management fee and may incur an incentive fee. Demeter bears
all other operating expenses.

REDEMPTIONS--As of the last day of any calendar quarter, Limited Partners may
redeem some or all of their Units at 100% of the Net Asset Value per Unit upon
five business days advance notice by redemption form to Demeter.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)


During 1997 and 1996, the Partnership sold securities in the Yield Pool in
order to fund redemptions as detailed below:
<TABLE>
<CAPTION>
                                        1997      1996
                                      --------- ---------
                                          $         $
<S>                                   <C>       <C>
Cost of Securities Sold               6,090,263 4,325,168
Interest Accreted on Securities Sold    456,047   130,978
Proceeds from Sale of Securities      6,206,254 4,140,685
</TABLE>

DISTRIBUTIONS--The Partnership will not make any distributions until after the
Guarantee Period, and thereafter will only make distributions on a pro-rata
basis at the sole discretion of Demeter.

INCOME TAXES--No provision for income taxes has been made in the accompanying
consolidated financial statements, as partners are individually responsible for
reporting income or loss based upon their respective share of the Partnership's
revenues and expenses for income tax purposes.

DISSOLUTION OF THE PARTNERSHIP--The Partnership will terminate on December 31,
2025, or at an earlier date if certain conditions set forth in the Limited
Partnership Agreement occur.

The Trading Company may terminate operations if its Net Assets decline to 5% or
less of consolidated Partnership Net Assets, and will terminate operations if
its Net Assets decline to less than 3% of consolidated Partnership Net Assets.
At December 31, 1997 and 1996, the Trading Company had Net Assets of $8,571,018
and $6,216,269 respectively, which represented 16% and 12% respectively, of the
consolidated Partnership's Net Assets at the respective dates. If the
operations of the Trading Company ceased, the remaining Net Assets would be
returned to the Partnership and held until the end of the Guarantee Period,
when they would be distributed to the Limited Partners.

2. RELATED PARTY TRANSACTIONS

The Trading Company pays a monthly brokerage fee to DWR as described in Note 1.
The Partnership's and Trading Company's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed. DWR pays
interest on these funds as described in Note 1. The Yield Pool is on deposit
with DWR in a customer security account.
Pursuant to the Limited Partnership Agreement, Demeter initially invested
$200,000 of General Partnership Interest in the Trading Company.
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)


3. TRADING MANAGER

Compensation to RXR as trading manager consists of a management fee and an
incentive fee as follows:

MANAGEMENT FEE--The Partnership pays a monthly management fee equal to 1/12 of
1% per month of the Partnership's adjusted Net Assets, as defined in the
Limited Partnership Agreement, as of the last day of each month.

INCENTIVE FEE--The Partnership will pay an annual incentive fee to RXR equal to
15% of the "New Appreciation", as defined in the Limited Partnership Agreement,
of the Trading Company's Net Assets as of the end of each annual incentive
period ending December 31. Such incentive fee is accrued in each month in which
"New Appreciation" occurs. In those
months in which "New Appreciation" is negative, previous accruals, if any,
during the incentive period will be reduced.

4. FINANCIAL INSTRUMENTS

The Partnership trades futures, options and forward contracts in interest
rates, stock indices, commodities, currencies, petroleum, and precious metals.
Futures and forwards represent contracts for delayed delivery of an instrument
at a specified date and price. Risk arises from changes in the value of these
contracts and the potential inability of counterparties to perform under the
terms of the contracts. There are numerous factors which may significantly
influence the market value of these contracts, including interest rate
volatility. At December 31, 1997 and 1996, open contracts were:

<TABLE>
<CAPTION>
                              CONTRACT OR
                            NOTIONAL AMOUNT
                         ---------------------
                            1997       1996
                         ---------- ----------
<S>                      <C>        <C>
                             $          $
EXCHANGE-TRADED CONTRACTS
Financial Futures:
 Commitments to Purchase 56,150,000 36,738,000
 Commitments to Sell      7,527,000 19,776,000
Commodity Futures:
 Commitments to Purchase        --   5,550,000
 Commitments to Sell      5,700,000  5,879,000
Foreign Futures:
 Commitments to Purchase 50,112,000 83,456,000
 Commitments to Sell     28,881,000  6,403,000
OFF-EXCHANGE-TRADED
FORWARD CURRENCY CONTRACTS
 Commitments to Purchase  2,606,000 11,219,000
 Commitments to Sell     11,542,000 24,545,000
</TABLE>

A portion of the amounts indicated as off-balance-sheet risk in forward
currency contracts is due to offsetting
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)

forward commitments to purchase and to sell the same currency on the same date
in the future. These commitments are economically offsetting, but are not
offset in the forward market until the settlement date.

The unrealized gains and losses on open contracts are reported as a component
of "Equity in Commodity futures trading accounts" on the Consolidated
Statements of Financial Condition and totaled $779,432 and $197,384 at December
31, 1997 and 1996, respectively.

Of the $779,432 net unrealized gain on open contracts at December 31, 1997,
$748,223 related to exchange-traded futures contracts and $31,209 related to
off-exchange-traded forward currency contracts.

Of the $197,384 net unrealized gain on open contracts at December 31, 1996,
$302,539 related to exchange-traded futures contracts and $(105,155) related to
off-exchange-traded forward currency contracts.

Exchange-traded futures contracts held by the Partnership at December 31, 1997
and 1996, mature through March 1998 and June 1997, respectively. Off-exchange-
traded forward currency contracts held by the Partnership at December 31, 1997
and 1996 mature through March 1998 and January 1997, respectively.

The contract amounts in the above table represent the Partnership's extent of
involvement in the particular class of financial instrument, but not the credit
risk associated with counterparty nonperformance. The credit risk associated
with these instruments is limited to the amounts reflected in the Partnership's
Consolidated Statements of Financial Condition.

The Partnership also has credit risk because either DWR or Carr acts as the
futures commission merchant or the counterparty, with respect to most of the
Partnerships' assets. Exchange-traded futures and options contracts are marked
to market on a daily basis, with variations in value settled on a daily basis.
DWR and Carr, as the futures commission merchants for all of the Partnership's
exchange-traded futures and options contracts, are required pursuant to
regulations of the Commodity Futures Trading Commission to segregate from their
own assets, and for the sole benefit of their commodity customers, all funds
held by them with respect to exchange-traded futures and option contracts
including an amount equal to the net unrealized gain on all open futures and
option contracts, which funds totaled $9,704,720 and $6,927,864 at December 31,
1997 and 1996, respectively. With respect to the Partnership's off-exchange-
traded forward currency contracts, there are
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONTINUED)

no daily settlements of variations in value nor is there any requirement that
an amount equal to the net unrealized gain on open forward contracts be
segregated. With respect to those off-exchange-traded forward currency
contracts, the Partnership is at risk to the ability of Carr, the sole
counterparty on all of such contracts, to perform. Carr's parent, Credit
Agricole Indosuez, has guaranteed Carr's obligations to the Partnership.

For the year ended December 31, 1997 and 1996, the average fair value of
financial instruments held for trading purposes was as follows:

<TABLE>
<CAPTION>
                                                         1997
                                                ----------------------
                                                  ASSETS   LIABILITIES
                                                ---------- -----------
<S>                                             <C>        <C>
                                                    $           $
EXCHANGE-TRADED CONTRACTS:
 Financial Futures                              61,485,000 17,437,000
 Options on Financial Futures                    2,226,000  4,442,000
 Commodity Futures                               5,800,000  4,475,000
 Foreign Futures                                37,032,000 32,469,000
OFF-EXCHANGE-TRADED FORWARD CURRENCY CONTRACTS  16,304,000 23,711,000
<CAPTION>
                                                         1996
                                                ----------------------
                                                  ASSETS   LIABILITIES
                                                ---------- -----------
<S>                                             <C>        <C>
                                                    $           $
EXCHANGE-TRADED CONTRACTS:
 Financial Futures                              48,280,000 20,650,000
 Options on Financial Futures                      717,000  4,639,000
 Commodity Futures                               6,775,000  3,814,000
 Foreign Futures                                51,243,000 17,579,000
OFF-EXCHANGE-TRADED FORWARD CURRENCY CONTRACTS  30,644,000 28,108,000
</TABLE>

5. LEGAL MATTERS

On September 6, 10, and 20, 1996, and on March 13, 1997, similar purported
class actions were filed in the Superior Court of the State of California,
County of Los Angeles, on behalf of all purchasers of interests in limited
partnership commodity pools sold by DWR. Named defendants include DWR, Demeter,
Dean Witter Futures & Currency Management Inc., MSDWD, (all such parties
referred to hereafter as the "Dean Witter Parties"), certain limited
partnership commodity pools of which Demeter is the general partner, and
certain trading advisors to those pools. On June 16, 1997, the plaintiffs in
the above actions filed a consolidated amended complaint, alleging, among other
things, that the defendants, committed fraud, deceit, negligent
misrepresentation, various violations of the California Corporations Code,
intentional and negligent
<PAGE>

DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--
(CONCLUDED)

breach of fiduciary duty, fraudulent and unfair business practices, unjust
enrichment, and conversion in the sale and operation of the various limited
partnerships commodity pools. Similar purported class actions were also filed
on September 18 and 20, 1996, in the Supreme Court of the State of New York,
New York County, and on November 14, 1996 in the Superior Court of the State of
Delaware, New Castle County, against the Dean Witter Parties and certain
trading advisors on behalf of all purchasers of interests in various limited
partnership commodity pools sold by DWR. A consolidated and amended complaint
in the action pending in the Supreme Court of the State of New York was filed
on August 13, 1997, alleging that the defendants committed fraud, breach of
fiduciary duty, and negligent misrepresentation in the sale and operation of
the various limited partnership commodity pools. On December 16, 1997, upon
motion of the plaintiffs, the action pending in the Superior Court of the State
of Delaware was voluntarily dismissed without prejudice. The complaints seek
unspecified amounts of compensatory and punitive damages and other relief. It
is possible that additional similar actions may be filed and that, in the
course of these actions, other parties could be added as defendants. The Dean
Witter Parties believe that they have strong defenses to, and they will
vigorously contest, the actions. Although the ultimate outcome of legal
proceedings cannot be predicted with certainty, it is the opinion of management
of the Dean Witter Parties that the resolution of the actions will not have a
material adverse effect on the financial condition or the results of operations
of any of the Dean Witter Parties.
<PAGE>




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